94/1072/ECSC: Commission Decision of 13 December 1994 authorizing the granting by Spain of aid to the coal industry in respect of 1994 (Only the Spanish text is authentic) (Text with EEA relevance)
Date: 1994-12-13
Institutions: European Commission
Subjects: Spain, State aid, cessation of trading, coal industry, industrial restructuring, severance pay













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31994D1072

94/1072/ECSC: Commission Decision of 13 December 1994 authorizing the granting by Spain of aid to the coal industry in respect of 1994 (Only the Spanish text is authentic) (Text with EEA relevance)  


Official Journal L 385 , 31/12/1994 P. 0031 - 0035 





COMMISSION DECISIONof 13 December 1994authorizing the  granting by Spain of aid to the coal industry in respect of 1994(Only the Spanish text is  authentic)(Text with EEA relevance)(94/1072/ECSC)THE COMMISSION OF THE EUROPEAN  COMMUNITIES, Having regard to the Treaty establishing the European Coal and Steel Community, Having regard to Commission Decision No 3632/93ECSC of 28 December 1993 establishing Community  rules for State aid to the coal industry (1), and in particular Articles 8 and 9 thereof, Whereas: IBy letter of 30 May 1994, pursuant to Article 8 (1) of Decision No 3632/93/ECSC, Spain notified  the Commission of its guidelines for a plan to reduce costs and/or activity in the coal industry. By letter of 7 November 1994, Spain notified the Commission of a modernization, rationalization,  restructuring and activity-reduction plan for the coal industry covering the period from 1 January  1994 to 31 December 1997. By letter of 29 November 1994, Spain forwarded further information. By letters of 7 and 29 November 1994, pursuant to Article 9 (1) of Decision No 3632/93/ECSC, Spain  notified the Commission of the financial support it intended to grant to the coal industry in the  1994 financial year. Under Decision No 3632/93/ECSC, the Commission must: - give an opinion as to the conformity of the modernization, rationalization, restructuring and  activity-reduction plan for the Spanish coal industry with the general and specific objectives of  the Decision, - rule on the following financial measures relating to 1994: - aid of Pta 107 426 million to cover operating losses, - aid of Pta 14 715 million to cover exceptional welfare aid paid to workers who lose their jobs as  a result of the measures to modernize, rationalize, restructure and reduce the activity of the  Spanish coal industry, - aid of Pta 8 374 million to cover the technical costs of closing down extraction installations as  a result of measures to modernize, rationalize, restructure and reduce the activity of the Spanish  coal industry. Spain's proposed financial measures for the coal industry conform to the provisions of Article 1 of  Decision No 3632/93/ECSC and must be approved by the Commission, in accordance with Article 9, on  the basis of the general criteria and objectives laid down in Article 2 and the specific criteria  established by Articles 3 and 4 of the Decision. In accordance with Article 9 (6), the Commission  must assess the conformity of the measures with the notified plans. IISpain's notified plan to modernize, rationalize, restructure and reduce the activity of the coal  industry must be examined in the light of the general criteria and objectives laid down in Article  2 (1) and the specific criteria and objectives established by Articles 3 and 4 of Decision No  3632/93/ECSC. The plan's objectives are based on the guidelines for coal set out in Spain's National Energy Plan  for 1991 to 2000. Accordingly, the notified plan is a continuation of the Restructuring,  Rationalization and Modernization Plan for the Coal Industry for 1990 to 1993 notified by Spain as  requested by the Commission in Decisions 90/198/ECSC (1) and 91/3/ECSC (2). By letter of 7 March  1994, Spain notified the Commission of the results of its 1990 to 1993 Plan. IIIThe 1994 to 1997 Plan is designed to make the coal industry more competitive and thereby lead  to the degression of aids. The Plan lays down modernization, rationalization and restructuring measures which coal  undertakings must implement to reduce their production costs over the period from 1994 to 1997 in  order to receive the operating aid provided for in Article 3 of Decision No 3632/93/ECSC. Undertakings which are unable to reduce their production costs or which, despite reducing them, are  still far from achieving economic viability, must be included in an activity-reduction plan of the  type laid down in Article 4 of Decision No 3632/93/ECSC. For the period 1994 to 1997, Spain's objective is a 2 % annual reduction in production costs  covered by aid, at constant prices, in those undertakings which receive operating aid within the  meaning of Article 3. This reduction could be greater for certain open-cast mines, given that aid  in such cases must cease by 31 December 1997. Production units or undertakings which receive aid to reduce activity in accordance with Article 4  will be obliged gradually to reduce their production capacity through total or partial closure. Spain has informed the Commission of its intention to notify a further plan for the period 1998 to  2002, to be drafted in the light of the progress made, principally with implementation of the  social and regional measures accompanying the restructuring of the coal industry. The notified plan includes the restructuring, rationalization and modernization of 65 undertakings,  50 of which are small with unit production of less than 200 000 tonnes a year, and a reduction in  activity together with total or partial closures of underground production units in 38  undertakings. By 31 December 1997 underground production will have been reduced by around 12 % and  the workforce by 27 % compared with 1993. In this respect, the Commission must, on the basis of the  Spanish Government's notification, pay particular attention to the restructuring of Minero  Siderúrgica de Ponferrada SA, which is the largest private undertaking in the sector. This  undertaking was declared insolvent on 2 July 1993. Following a major write-off of debts, primarily  by the Social Security funds, insolvency proceedings were terminated on 14 July 1994. In view of the unfavourable geological conditions of Spain's coalfields, which limit the  possibility of modernization and rationalization, aid can be significantly reduced only through  restructuring, or through the progressive and continuous reduction of mining by the undertakings in  question. The plan notified by Spain conforms to the provisions of the first two indents of Article 2 (1) of  Decision No 3632/93/ECSC, namely to make, in the light of coal prices on international markets,  further progress towards economic viability with the aim of achieving degression of aids, and to  solve the social and regional problems created by total or partial reductions in activity. In evaluating the plan, and being aware that in the light of coal prices on international markets  the undertakings concerned would be able to make only limited progress towards greater economic  viability, the Commission recognized the priority need to attenuate as far as possible the social  and regional impact of restructuring and to provide coal undertakings with a medium-term outlook so  that they could complete their restructuring. Spain will ensure that the elements of the plan comply with Article 9 (7) of Decision No  3632/93/ECSC. As regards contracts concluded between electricity and coal producers, the Commission  reserves the right to decide the consequences of any decision it might adopt in this field, in  accordance with Article 65 of the ECSC Treaty or Article 85 (3) of the EC Treaty. In view of the above, the Commission considers the plan notified by Spain to be in conformity with  the specific objectives established in Articles 3 and 4 of Decision No 3632/93/ECSC, provided that  all the conditions laid down in the latter are complied with, and in particular the condition  relating to discrimination between producers, purchasers and consumers of coal in the Community. In view of the particular circumstances affecting Minero Siderúrgica de Ponferrada SA, the  Commission is giving its opinion, in accordance with Article 8 (3) of the Decision, on the  conformity of that undertaking's plan with the general and specific objectives, without prejudging  whether the measures planned are capable of attaining those objectives. Accordingly, Spain will  report to the Commission, no later than 30 March and 30 September of 1995, 1996 and 1997, giving  details of the level of compliance with that undertaking's restructuring plan. IVThe aid of Pta 107 426 million which Spain plans to grant the coal industry is intended to  compensate in full or in part for operating losses. Spain's coal producers (Carbunion) and electricity producers (Unesa) have agreed, in respect of  1994, to a sales price for Spanish coal under the new system of public contracts for coal used in  power stations (NSCCT) which, though still considerably higher than the prices obtaining on the  world market, is nonetheless closer to them than the reference price which prevailed up to 31  December 1993. The notified sum subdivides into operating aid of Pta 29 219 million in accordance with Article 3  of Decision No 3632/93/ECSC and aid of Pta 78 207 million to reduce activity in accordance with  Article 4 thereof. The inclusion of this measure in the notified modernization, rationalization, restructuring and  activity-reduction plan, and the degression of aid, quantities and costs planned for 1994 meet the  objectives of the first and second indents of Article 2 (1) of the Decision, namely to make, in the  light of coal prices on international markets, further progress towards the economic viability of  the 65 undertakings concerned with the aim of achieving degression of aids, and to solve the social  and regional problems caused by developments in the mining industry. Of the operating aid of Pta 29 219 million, Pta 22 239 million will be covered by the electricity  producers in accordance with NSCCT-related provisions, while the remaining Pta 6 980 million will  come from State budgets. As established in Article 3 of Decision No 363293/ECSC, the observed degression of aid is helping  to improve the economic viability of the undertakings concerned by reducing production costs. Of the aid of Pta 78 207 million to reduce activity, Pta 20 591 million will be covered by the  electricity producers in accordance with NSCCT-related provisions, while the remaining Pta 57 616  million will come from State budgets. Of the aid of Pta 57 616 from the general State budget, Pta 49 176 million, Pta 5 438 million and  Pta 3 002 million is intended for the Hunosa, Minas de Figaredo SA and Mina de la Camocha SA  undertakings of the central Asturias coalfield respectively. This aid forms part either of a plan for the progressive and continuous reduction of activity or of  a closure plan, and therefore complies with Article 4 of Decision No 3632/93/ECSC. In its notification, Spain guaranteed that for each undertaking or production unit the aid granted  would not exceed the difference between production costs and foreseeable revenue from the free  agreement between the parties. The Commission finds that a sum of Pta 1 646 million covering part of the operating losses of  Hunosa corresponds to activities other than coal production, on which the Commission cannot give an  opinion within the framework of Decision No 3632/93/ECSC. Spain will ensure that those arrangements comply with Article 9 (7) of Decision No 3632/93/ECSC. In view of the above and on the basis of the information provided by Spain, this aid is compatible  with the objectives of Decision No 3632/93/ECSC and with the proper functioning of the common  market. VThe aid of Pta 14 715 million which Spain is proposing to grant will cover compensation for the 7  300 workers in Spanish coal undertakings who will lose their jobs or have to take early retirement  under the modernization, rationalization, restructuring and activity-reduction plan for the Spanish  coal industry. Parts of this aid, amounting to Pta 3 606 million, Pta 986 million and Pta 248 million, are to be  granted to the Hunosa, Minas de Figaredo SA and Mina de la Camocha SA undertakings respectively and  are to be covered by the general State budget. The remaining Pta 9 875 million is intended for the other undertakings affected by modernization,  rationalization and restructuring measures or by measures to reduce activity and will be covered by  financial support from the Electricity Compensation Office (Ofico). Ofico is a public body financed  by contributions from electricity-generating companies through a levy on electricity prices charged  to consumers. The financial support from Ofico is designed to repay to the electricity-generating companies  certain amounts they have to pay to the coal-producing undertakings. The Order of the Spanish  Ministry of Industry and Energy of 6 July 1994 and the Resolution of the Secretariat General of  Energy and Mineral Resources which implements it establish compensatory measures financed by Ofico  to assist workers from coal undertakings which have not signed a contract with the State who take  early retirement or lose their jobs as a result of the modernization, rationalization,  restructuring and activity-reduction plan for the Spanish coal industry. Ofico's support constitutes 'aid' within the meaning of Article 1 (3) of Decision No 3632/93/ECSC,  which refers to the allocation, for the direct or indirect benefit of the coal industry, of the  charges rendered compulsory as a result of State intervention, without any distinction being drawn  between aid granted by the State and aid granted by public or private bodies appointed by the State  to administer such aid. Accordingly, the Commission must give an opinion on this measure in  accordance with Article 9 of the Decision. Those financial measures relate to action made necessary by the modernization, rationalization and  restructuring of the Spanish coal industry and cannot therefore be considered to be related to  current production (inherited liabilities). Pursuant to Article 5 of Decision No 3632/93/ECSC, the aid mentioned explicitly in the Annex to the  Decision, namely the cost of paying social-welfare benefits resulting from the pensioning-off of  workers before they reach statutory retirement age and other exceptional expenditure on workers who  lose their jobs as a result of restructuring and rationalization, can be considered compatible with  the common market provided that the amount paid does not exceed such costs. Spain will ensure that these arrangements comply with Article 9 (7) of Decision No 3632/93/ECSC. In view of the above and on the basis of the information provided by Spain, this aid is compatible  with the objectives of Decision No 3632/93/ECSC and with the proper functioning of the common  market. VIThe aid of Pta 8 374 million which Spain proposes to grant is intended to cover the loss of  value of the fixed assets of coal undertakings which have to close down totally or partially.  Furthermore, those undertakings have to bear exceptional costs resulting from the progressive  closures which will take place, initially, up to 31 December 1997. Part of this aid, totalling Pta 2 504 million, is to be granted to Hunosa and covered by the  general State budget. The remaining Pta 5 870 million is intended for the other undertakings  reducing their activity and will be covered by financial support from Ofico. The purpose of this support is to repay to the electricity-generating companies certain amounts  they have to pay to the coal-producing undertakings. The Order of the Spanish Ministry of Industry  and Energy of 6 July 1994 and the Resolution of the Secretariat General of Energy and Mineral  Resources which implements it establish compensatory measures finaced by Ofico to assist coal  undertakings which have not signed a contract with the State and which will have to reduce their  production capacity under the plan. Ofico's support constitutes aid within the meaning of Article 1 (3) of Decision No 3632/93/ECSC,  which refers to the allocation, for the direct or indirect benefit of the coal industry, of the  charges rendered compulsory as a result of State intervention, without any destinction being drawn  between aid granted by the State and aid granted by public or private bodies appointed by the State  to administer such aid. Accordingly, the Commission must give an opinion on this measure in  accordance with Article 9 of the Decision. Those financial measures relate to action made necessary by the modernization, rationalization and  restructuring of the Spanish coal industry and cannot therefore be considered to be related to  current production (inherited liabilities). Pursuant to Article 5 of Decision No 3632/93/ECSC, the aid mentioned explicitly in the Annex to the  Decision, namely exceptional intrinsic depreciation provided that it results from the restructuring  of the industry (without taking account of any revaluation which has occured since 1 January 1986  and which exceeds the rate of inflation), can be considered compatible with the common market  provided that the amount paid does not exceed such costs. Spain will ensure that the arrangements comply with Article 9 (7) of Decision No 3632/93/ECSC. In view of the above and on the basis of the information provided by Spain, this aid is compatible  with the objectives of Decision No 3632/93/ECSC and with the proper functioning of the common  market. VIIThe Spanish Government will ensure that the granting of the operating aid covered by this  Decision gives rise to no discrimination between producers, purchasers and consumers in the  Community coal market. In view of the above and on the basis of the information provided by Spain, the aid and measures  planned to assist the coal industry are compatible with the objectives of Decision No 3632/93/ECSC  and with the proper functioning of the common market. This Decision does not prejudge the compatibility with the Treaties of any contracts which may be  concluded between coal and electricity producers. In accordance with the second indent of Article 3 (1) and with Article 9 (2) and (3) of Decision No  3632/93/ECSC, the Commission must verify that aid authorized for current production relates solely  to the purposes set out in Articles 3 and 4 of the Decision. In this respect, it must be informed  of the amounts and distribution of payments, HAS ADOPTED THIS DECISION: Article 1Spain is hereby authorized to pay the following aid in respect of the  1994 financial year: - aid of Pta 105 780 million to cover operating losses by coal undertakings, - aid of Pta 14 715 million to cover exceptional welfare aid paid to workers who lose their jobs as  a result of the measures to modernize, rationalize, restructure and reduce the activity of the  Spanish coal industry, - aid of Pta 8 374 million to cover the technical costs of closing down mining installations as a  result of the measures to modernize, rationalize, restructure and reduce the activity of the  Spanish coal industry. Article 2Spain shall ensure that any unspent or overestimated aid covered by this Decision is  repaid to it. Article 3Spain shall notify the Commission, by 30 June 1995 at the latest, of the amount of aid  actually paid in respect of the 1994 financial year. Article 4Spain shall report to the Commission, by 30 March 1995 and 30 September 1995 at the  latest, giving details of the level of compliance with the restructuring plan by Minero Siderúrgica  de Ponferrada SA. Article 5This Decision is addressed to the Kingdom of Spain. Done at Brussels, 13 December 1994. For the CommissionMarcelino OREJAMember of the Commission(1) OJ No L 329,  30. 12. 1993, p. 12. (1) OJ No L 105, 25. 4. 1990, p. 19. (2) OJ No L 5, 8. 1. 1991, p. 27.